Two main types of external sources

Date: 2015-10-07; view: 571.

External sources of funding can be classified according to different criteria. One of them is the formalization of the relationship between the lender and the borrower. In this case, the forms of external financing include: bank loans, advances to factoring, leasing companies. Informal sources of funding include loans from friends and the owner or owners of the business, personal loans. The percentage of informal sources are much more used by newly created companies than those that have already passed the initial period of its activity.